'It'll worsen business environment' -- MAN, LCCI criticise CBN over interest rate hike

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The Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) have criticised the interest rate hike by CBN.

Aderonke OniThe Manufacturers Association of Nigeria and the Lagos Chamber of Commerce and Industry have criticised the Central Bank of Nigeria over the interest rate hike.the monetary policy rate , which benchmarks interest rates, from 26.75 percent to 27.25 percent.

He said with borrowing costs now exceeding 35 percent, manufacturers are struggling to maintain competitiveness and expand production capacity.“With the increase in borrowing costs, manufacturers will now pay over 35% on their credit facilities. Clearly, this will lead to an increase in production costs, higher prices of finished goods, lower competitiveness and production capacity expansion,” he said.

Ajayi-Kadir said the broader implications of the challenges threaten not only the manufacturing sector but also the Nigerian economy as a whole, as higher borrowing costs lead to poor access to funds, lower capacities and potential business closures.Ajayi-Kadir urged the Ajayi-Kadir recommended promoting renewable energy and improving infrastructure within industrial hubs to reduce operational costs for manufacturers.Chinyere Almona, LCCI’s DG, said the CBN’s inflation control efforts had yielded some marginal gains but had done little to address the root causes of inflation.

She said the CBN’s justification for raising the monetary policy rate due to fears of a petrol price hike is not a sustainable argument.

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